Question
The following are the projected cash flows to the firm over the next five years: Year Cash Flows to the Firm (Million) 1 $120 2
The following are the projected cash flows to the firm over the next five years:
| Year | Cash Flows to the Firm (Million) |
|---|---|
| 1 | $120 |
| 2 | $145 |
| 3 | $176 |
| 4 | $199 |
| 5 | $245 |
The firm has a cost of capital (WACC )of 12% and the cash flows are expected to grow at the rate of 4% in perpetuity?
a) What is the value of the firm today?
b) At what growth rate will the firm have a value of $3000 Million?
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Entrepreneurial Finance Venture Capital Deal Structure And Valuation
Authors: Janet Kiholm Smith, Richard L. Smith
2nd Edition
1503603210, 978-1503603219
